China downplays Venezuela debt risks

"We also believe the Venezuelan government and people have the ability to handle the debt issue of their country", Geng said.

S&P says Venezuela is also overdue on four other bond payments worth a total of $420m but that the grace period has not yet expired on those payments. S&P lowered two issues' ratings to "D" (default) and said there is a one in two chance that the government.

Yesterday, as nervous, mainly US, creditors met in Caracas to find out what might happen to the US$ Venezuelan sovereign bonds they own, S&P downgraded these to "soon-to-default" status.

Participants at the meeting told AFP that officials said the government meant to form working groups to evaluate short- and mid-term debt renegotiation proposals, but gave no specifics.

On Monday, government officials met with creditors in Caracas in an attempt to restructure its debt.

Beijing and Moscow have emerged as Venezuela's most reliable sources of funding, with China owed $28 billion and Russian Federation $8 billion.